Daikin to invest $94 mln in air conditioner plant in Vietnam

By Dam Tuan   July 23, 2016 | 09:33 pm GMT+7

The Japanese MNC's first air conditioner manufacturing plant in Vietnam will produce half a million units a year.

Daikin Industries Ltd. has decided to pour JPY10 billion ($94 million) into an air conditioner assembly plant in Vietnam to meet growing demand in the region, the company said in a statement. 

The Japanese multinational air conditioner manufacturer will establish its first production base in Vietnam at Thang Long Industrial Park II on the outskirts of Hanoi. The plant will join existing Daikin production bases in Thailand, Malaysia and India as the newest factory in Asia.

Scheduled to open in April, 2018, the plant is expected to produce around 500,000 units a year, which could double by 2020, depending on demand, according to Asian Nikkei Review. 

Given a population of 93 million and rising incomes, demand for domestic air conditioners in Vietnam stands at two million a year and sales are growing at an average of 30 percent a year.

With comparably high electricity bills relative to income, energy-saving products such as inverter-type air conditioners continue to gain popularity in the Southeast Asian country. 

Almost all Daikin units currently sold in Vietnam are manufactured in Thailand where its plant has been operating at full capacity. 

Daikin has made strengthening the air conditioning business in the rapidly growing market of Asia an important measure in its strategic management plan. The company aims for JPY380 billion ($3.58 billion) in sales for Asia in 2018 as it works to further expand business in every country beginning with Vietnam.

Other large overseas manufacturers, according to the Asian Nikkei Review, also keep their eyes on Vietnam, especially Gree (China) and UTC Carrier (USA).

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